Consumer behaviour is changing. This means retail is changing. (Sherlock is my middle name.)
Not every retail format/category can respond in the same way to these changes in the same way. But there is a retail format that most other retailers can learn from that will highlight how retailers must start thinking differently about how they add value and how the consumer is approaching the retail transaction.
How do people buy cars?
- The premise is a showroom.
- The customer comes informed – armed with extensive pre-purchase knowledge.
- Customers know (often) a lot more about their preferred brand/purchase and the product itself than the sale person
- They kick a lot of tyres and they ask a lot of questions.
- They believe everything is negotiable and they know where they can go for a better deal.
- They demand a test drive.
- They (often) don’t make the decision alone.
- They want to endlessly customise and add/remove features
- They have figured all the phony fees and charges and the exorbitant add-ons like rust-proofing and over-priced warranties
- They want it when they want it
- The days of the sleazy car salesman are over. (Killed by word-of-mouth and powerful personal referral networks.)
- The mega dealer that offers all the bells and whistles is de rigueur.
- Dodgy corner lots are shrinking and auto alleys are dwindling.
- Plasmas, play areas, pouffes and Nespresso lattes in the waiting area.
- They have figured out their value proposition. The dealers don’t make much money on the actual car sale but make it from the services, accessories and the like.
- They have come to appreciate the value of fostering loyalty even though it is a long time between purchases.
So, the good ones have adapted and they are doing well.
What you have to do is think about that pair of shoes you sell as a KIA – and then re-think how you do business.
Dennis @ Ganador